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Insurance company won’t pay entire medical bill? New state rules will help

San Diego Union-Tribune (CA)

July 31--California this month instituted some of the nation's toughest rules against "balance billing," which has affected tens of millions of patients over the years.

What is balance billing? Peggy Herron's plight offers a good explainer. Had her ambulance ride occurred this month instead of last January, Herron wouldn't have spent months fighting a $1,300 medical bill.

After her breast cancer recurred in late 2016, the Oceanside woman became hospitalized at Scripps Memorial in Encinitas. On Jan. 19, she needed a non-emergency ambulance ride to a skilled-nursing facility in Serra Mesa.

Herron was astounded to later receive a bill from American Medical Response, the company whose ambulance transported her from the hospital to the nursing home. She was surprised because her insurance company had indicated that she owed only a $75 co-pay.

The $1,300 bill from AMR, she said, was particularly shocking because she knew the trip had been preauthorized by the same medical insurer. She figured that if her insurance policy didn't cover the whole expense of the journey, someone would have alerted her before she was loaded up and driven away.

"I wasn't told beforehand that I was going to be billed for that. It just came out of the blue," said Herron, 63.

This was an example of balance billing, also known as "surprise billing."

"These kinds of surprise bills can occur when an out-of-network service is provided at an in-network facility like a hospital," said Betsy Imholz, special projects director for Consumers Union, a nonprofit policy and advocacy group connected to the product testing and rating publication Consumer Reports.

In other words, the hospital where the patient is staying may be under contract with that person's insurance company -- so it's considered an in-network arrangement. But certain surgeons, anesthesiologists, radiologists, ambulance companies and others providing service at that hospital may not be part of the network, and they can charge rates higher than the usual contracted amounts. The patients are billed for whatever portion, the remaining balance, their insurance companies won't cover.

In 2015, Consumers Union published a survey showing that one in four Californians who had undergone surgery or received other treatment at a hospital were charged an out-of-network rate when they thought the health provider was in-network.

The survey helped spur action in Sacramento.

Last year, the Legislature passed Assembly Bill 72, which forbids balance billing for out-of-network care at in-network facilities. The law took effect on July 1.

Some of the most common balance-billing situations involve anesthesiology and imaging services delivered in settings that range from hospitals to labs to stand-alone imaging centers, according to the state Department of Managed Health Care.

The new law complements older California statutes that forbid balance billing in emergency circumstances. Now that AB 72 is in effect, Imholz said California has some of the nation's toughest laws on surprise billing.

"Fifteen have some protections against balance billing, but just six have comprehensive protections. California's are especially strong," she said.

But there are still some caveats.

The biggest is the fact that California's regulations don't include "self-insured" health plans regulated by the U.S. Department of Labor under the Employee Retirement Income Security Act of 1974. That federal legislation covers about 40 percent of those with commercial insurance in the Golden State.

And given that out-of-network balance billing has been going on for a long time, there are bound to still be some cases of the practice occurring today -- in violation of the newly rolled out AB 72.

"We tell people not to panic. Call your plan and the provider to clarify the situation, and don't pay anything unless you've gathered all the information," Imholz said.

Insurance companies are required to accept grievances for suspected inappropriate billing and have 30 days to resolve the problem.

It looked to be too late for Herron, the Oceanside resident with the $1,300 balance bill for her January ambulance ride. Her efforts to file a grievance with her insurance company and various state regulators went nowhere.

Then last week, after The San Diego Union-Tribune began looking into her case, Herron said she received an unexpected call from her health plan saying the remaining balance would be written off.

A spokesman for American Medical Response, the ambulance company, said Friday in an email that the company "looked into the matter and found a billing error and will write it off."

The state Department of Managed Health Care will get involved if consumers of medical plans it regulates -- largely HMO plans -- are not satisfied. The department's help center can be reached at (888) 466-2219 or by visiting healthhelp.ca.gov.

In addition, the California Department of Insurance operates a help line for people enrolled in preferred provider organization (PPO) plans. The number is (800) 927-4357.